At +0.5%, French growth rebounded stronger than expected in the 2nd quarter – Economy

After a decline of 0.2% in the first quarter, France returned to growth from April to June, recording a more dynamic rebound than expected in its GDP which rose by 0.5% in this second quarter, according to data published this Friday by INSEE.

In their latest forecasts, the National Institute of Statistics and the Banque de France respectively forecast growth of 0.25% and 0.2% between April and June.

The good performance of the French economy in the second quarter can be explained both by a clearly positive contribution of foreign trade to growth and a less marked drop in household consumption than in the first quarter.

Falling imports and household consumption

According to this first estimate of the national accounts, which will have to be confirmed at the end of August by INSEE, imports fell by 0.6% in the second quarter, while exports jumped by 0.8%.

The latter were “driven in particular by transport services (+6.3% after +5.0% in the first quarter) and spending by foreign travelers in France (+8.6% after +5.0%)” , details INSEE.

The World Bank sharply lowers its global growth forecast to 2.9% this year

“Conversely, exports of goods fell back (-0.6% after +1.4%), particularly in transport equipment and agri-food,” the institute further explains.

As for consumption, the traditional driver of the French economy, it remains negative for purchases of goods (-1.3%), but purchases of services are on the rise again (+1.5%). Two contradictory trends leading to an overall decline of 0.2% in household consumption in the second quarter.

Growth of 2.5% expected in 2022

With the figures published this Friday, INSEE estimates the growth overhang of the French economy at 2.5% for the year 2022.

A figure in line with the government’s annual growth forecast, and slightly higher than the expectations of the Banque de France or the IMF (+2.3%).

The United States in recession

The INSEE data are published the day after the publication of the American growth figures for the second quarter (-0.9% at an annualized rate after -1.6% in the 1st quarter), which technically brought the country into recession.

In Europe, growth estimates for the euro zone and several large countries of the Old Continent are also to be unveiled this Friday morning.